Exhibit 4.1
CEC ENTERTAINMENT, INC.
NON-EMPLOYEE DIRECTORS RESTRICTED STOCK PLAN
The CEC Entertainment, Inc.
Non-Employee Directors Restricted Stock Plan (hereinafter called
the “Plan” as amended, from time to time) was adopted
by the board of directors of CEC Entertainment, Inc., a Kansas
corporation (hereinafter called the “Company”), on
March 28, 2005 and will be effective upon its approval by the
stockholders of the Company (the “Effective
Date”).
Article 1
PURPOSE
The purpose of the Plan is to
attract, retain and award the services of the non-employee
directors of the Company and to provide such persons with a
proprietary interest in the Company through the granting of
restricted stock that will further align their interests with the
interests of the Company’s other stockholders. Upon the
approval of the Plan by the stockholders of the Company, the
Company intends to use the Plan as the primary means through which
the Company issues equity to its non-employee directors for their
service to the Company as directors and to discontinue issuing
stock options to such directors pursuant to the Company’s
Non-Employee Directors Stock Option Plan.
Article 2
DEFINITIONS
For the purpose of the Plan, unless
the context requires otherwise, the following terms shall have the
meanings indicated:
2.1 “Board” means the
board of directors of the Company.
2.2 “Change of Control”
means any of the following: (i) any consolidation, merger or
share exchange of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of
the Company’s Common Stock would be converted into cash,
securities or other property, other than a consolidation, merger or
share exchange of the Company in which the holders of the
Company’s Common Stock immediately prior to such transaction
have the same proportionate ownership of Common Stock of the
surviving corporation immediately after such transaction;
(ii) any sale, lease, exchange or other transfer (excluding
transfer by way of pledge or hypothecation) in one transaction or a
series of related transactions, of all or substantially all of the
assets of the Company; (iii) the stockholders of the Company
approve any plan or proposal for the liquidation or dissolution of
the Company; (iv) the cessation of control (by virtue of their
not constituting a majority of directors) of the Board by the
individuals (the “Continuing Directors”) who were
members of the Board for the immediately preceding two
(2) years (unless the election, or the nomination for election
by the Company’s stockholders, of each new director was
approved by a vote of at least two-thirds (2/3)
of the
directors then still in office who were directors at the beginning
of such a period); (v) the acquisition of beneficial ownership
(within the meaning of Rule 13d-3 under the 1934 Act) of an
aggregate of 30% of the voting power of the Company’s
outstanding voting securities by any person or group (as such term
is used in Rule 13d-5 under the 1934 Act) who beneficially
owned less than 15% of the voting power of the Company’s
outstanding voting securities on the date of this Plan, or the
acquisition of beneficial ownership of an additional 15% of the
voting power of the Company’s outstanding voting securities
by any person or group who beneficially owned at least 15% of the
voting power of the Company’s outstanding voting securities
on the date of this Plan; provided , however , that
notwithstanding the foregoing, an acquisition shall not constitute
a Change of Control hereunder if the acquiror is (A) a trustee
or other fiduciary holding securities under an employee benefit
plan of the Company and acting in such capacity, (B) a
Subsidiary of the Company or a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of voting securities of the
Company or (C) any other person whose acquisition of shares of
voting securities is approved in advance by a majority of the
Continuing Directors; or (vi) in a Title 11 bankruptcy
proceeding, the appointment of a trustee or the conversion of a
case involving the Company to a case under Chapter 7.
2.3 “Code” means the
Internal Revenue Code of 1986, as amended.
2.4 “Committee” means the
committee designated to administer the Plan in accordance with
Article 3 of this Plan.
2.5 “Common Stock” means
the common stock of the Company, par value $ 0.10 per share, which
the Company is currently authorized to issue or may in the future
be authorized to issue.
2.6 “Date of Grant” means
the effective date on which a Restricted Stock Award is made to an
Eligible Director as set forth in the applicable Restricted Stock
Agreement.
2.7 “Director” means a
member of the Board.
2.8 “Eligible Director”
means a Non-employee Director who was previously appointed or
elected to the Board and who continues to serve in such capacity at
the time for granting Restricted Stock Awards pursuant to
Section 6.1.
2.9 “Employee” means a
common law employee, including an employee who is also an Officer
or Director, (as defined in accordance with the Regulations and
Revenue Rulings then applicable under Section 3401(c) of the Code)
of the Company or any Subsidiary. “Employee” does not
include Non-employee Directors.
2.10 “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and any successor
statute. Reference in the Plan to any section of the Exchange Act
shall be deemed to include any amendments or successor provisions
to such section and rules and regulations relating to such
section.
2.11 “Fair Market Value”
of a share of Common Stock means the average of the closing prices
of the Common Stock as reported by the New York Stock Exchange for
the five trading day period ending on and including the date of a
Restricted Stock Award.
2.12 “Officer” means a
person who is an “officer” of the Company or a
Subsidiary within the meaning of Section 16 of the Exchange
Act (whether or not the Company is subject to the requirements of
the Exchange Act).
2.13 “Non-employee
Director” means a member of the Board who is not an
Employee.
2.14 “Removal” means
removal of a Non-employee Director from the Board, with or without
cause, in accordance with the Company’s Certificate of
Incorporation, Bylaws or Kansas General Corporation Code.
2.15 “Restriction Period”
means the period during which the Common Stock under a Restricted
Stock Award is nontransferable and subject to “Forfeiture
Restrictions” as defined in Section 6.2 of the Plan and
set forth in any related Restricted Stock Agreement.
2.16 “Restricted Stock”
means shares of Common Stock issued to an Eligible Director
pursuant to Section 6.1 of this Plan which are subject to
restrictions or limitations set forth in this Plan and in any
related Restricted Stock Agreement.
2.17 “Restricted Stock
Agreement” means the written agreement evidencing the grant
of a Restricted Stock Award executed by the Company and the
Eligible Director, including any amendments thereto. Each
Restricted Stock Agreement shall be subject to the terms and
conditions of the Plan.
2.18 “Restricted Stock
Award” means an award granted under Section 6.1 of this
Plan of shares of Common Stock issued to an Eligible
Director.
2.19 “Securities Act”
means the Securities Act of 1933, as amended, and any successor
statute. Reference in the Plan to any section of the Securities Act
shall be deemed to include any amendments or successor provisions
to such section and any rules and regulations relating to such
section.
2.20 “Subsidiary” means
(i) any corporation in an unbroken chain of corporations
beginning with the Company, if each of the corporations other than
the last corporation in the unbroken chain owns stock possessing a
majority of the total combined voting power of all classes of stock
in one of the other corporations in the chain, (ii) any
limited partnership, if the Company or any corporation described in
item (i) above owns a majority of the general partnership
interest and a majority of the limited partnership interests
entitled to vote on the removal and replacement of the general
partner, and (iii) any partnership or limited liability
company, if the partners or members thereof are composed only of
the Company, any corporation listed in item (i) above or any
limited partnership listed in item (ii) above.
“Subsidiaries” means more than one of any such
corporations, limited partnerships, partnerships or limited
liability companies.
2.21 “Termination of
Service” occurs when an Eligible Director shall cease to
serve as a Non-employee Director for any reason.
Article 3
ADMINISTRATION
The Plan shall be administered by the
Compensation Committee of the Board unless and until such time as
the Board appoints other members of the Board to serve as the
Committee.
Subject to the express provisions of
the Plan, the Committee shall have power and authorities which are
exclusively ministerial in nature, including the authority to
construe and interpret the Plan, to define the terms used in the
Plan, to prescribe, amend, and rescind rules and regulations
relating to the administration of the Plan and to make all other
determinations necessary or advisable for the administration of the
Plan. The determination of the Committee on all such matters
referred to in the Plan shall be conclusive. No member of the
Committee shall be liable for any action, failure to act,
determination or interpretation made in good faith with respect to
the Plan or any transaction under the Plan.
Article 4
ELIGIBILITY
Non-employee Directors, including
Non-employee Directors who are members of the Committee, shall be
eligible to participate in the Plan. Each Eligible Director shall,
if required by the Company, enter into an agreement with the
Company in such form as the Committee shall determine consistent
with the provisions of the Plan for purposes of implementing the
Plan or effecting its purposes. In the event of any inconsistency
between the provisions of the Plan and any such agreement, the
provisions of the Plan shall govern.
Article 5
SHARES SUBJECT TO THE PLAN
Subject to adjustment as provided
herein, the maximum number of shares of Common Stock that may be
issued pursuant to Restricted Stock Awards granted under the Plan
is 50,000 shares. Shares of Common Stock previously subject to
Restricted Stock Awards hereunder which are forfeited or cancelled
may be reissued pursuant to Restricted Stock Awards.
Article 6
GRANT
OF RESTRICTED STOCK AWARD
6.1 Awards . Following the
Effective Date, on every fifth Business Day in January each
Eligible Director shall be granted a Restricted Stock Award for the
number of shares of Common Stock having a Fair Market Value as of
the Date of Grant equal to $75,000.00 (the “Annual
Grant”). If a person first becomes an Eligible Director
between the date of Annual Grants, such Eligible Director shall be
granted a Restricted Stock Award for the number of
shares
of Common Stock having the Fair Market Value as of the date he or
she becomes an Eligible Director equal to $75,000.00 multiplied by
a fraction the numerator of which is the number of days from the
date such person becomes an Eligible Director until the date of the
next Annual Grant and the denominator of which is 365. For the
purposes of the Plan, the term “Business Day” shall
mean a day on which the New York Stock Exchange is open for
business and is conducting normal trading activity.
6.2 Forfeiture Restrictions .
Shares of Common Stock that are the subject of a Restricted Stock
Award shall be subject to restrictions on disposition by the
Eligible Director and to an obligation of the Eligible Director to
forfeit and surrender the shares to the Company under certain
circumstances (the “Forfeiture Restrictions”). The
Forfeiture Restrictions shall be determined by the Committee, in
its sole discretion, and the Committee may provide that the
Forfeiture Restrictions shall lapse on the passage of time or the
occurrence of such other event or events determined to be
appropriate by the Committee. The Forfeiture Restrictions
applicable to a particular Restricted Stock Award (which may differ
from any other such Restricted Stock Award) shall be stated in the
Restricted Stock Agreement.
6.3 Vesting . The Forfeiture
Restrictions referred to in Section 6.2 above for any
particular Restricted Stock Award shall include the following
vesting schedule:
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Portion of Shares That |
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Are Vested On or After |
| Anniversary of |
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Such Anniversary and |
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Date of Grant |
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Before Next Anniversary |
| First |
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25% |
| Second |
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50% |
| Third |
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75% |
| Fourth |
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100% |
If an Eligible Director’s
membership on the Board is terminated pursuant to his or her
(i) Removal, (ii) not being re-nominated for Board
membership for the next succeeding period, (iii) being nominated
fo
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